BEC eblast – July 2008
HMRC 6 v Taxpayers 4
Whilst all the press have been excited about HMRC’s clarification of the position on the use of home (see later) there has been no outcry about further rule changes. A proposal within the Finance Bill 2008 is set to reduce the time taxpayers can claim their repayment from HMRC from six years to four years. In contrast HMRC will have six years or more to seek payment from taxpayers. Further noises at HMRC offices have been shouting their intention to go back as far as 20 years to recoup unpaid taxes. Unsurprisingly, HMRC want to introduce this legislation even when the errors arise from their own side of the fence. This abuse of power seems to be going unnoticed as HMRC attempts to trample over the taxpayer again.
Where have all the staff gone?
Research has finally confirmed the mutterings between business owners. Despite the recession, economic downtown, whatever, businesses are finding it a challenge to recruit and retain staff.
A recent survey found that less than 60% of employees had been in their current position for under two years. Some 68% planned to change jobs inside six months despite the economic downturn.
Credit crunch hits credit card
Credit card company MBNA has struck two blows for their cardholders. The minimum monthly repayment has been increased from 3% to 5% of the balance outstanding. Secondly, MBNA have hiked their interest rate for those cardholders leaving the current 0% balance transfer rate.
European company is born
The European Commission has launched the EU Small Business Act to encourage and promote enterprise across EU Member States. The Act seeks to reduce the administrative burden on small businesses and promote youth enterprise.
The flagship of the EU Small Business Act is the birth of the ‘European Private Company’, to help small businesses operating across borders. The Act is yet to be ratified across the member states.
Business start-ups on the rise
The first quarter of 2008 has witnessed the highest level of start-ups, 98,000 for the past three quarters according to Barclays bank. The main sectors for start-ups are business and financial services, construction and the retail sector.
“Small business entrepreneurs are finding opportunities in the market place. They are entering in reduced numbers, reflecting an uncertainty over short-term economic prospects, but clearly there’s a feeling there is never a bad time to start a good business,” according to John Davis, Marketing Director for Local Business at Barclays,
Electricity in the workplace
Over 1,000 incidents and 25 deaths in the workplace per year arise from electricity. As part of Norwich Union’s Simply Safety campaign, a downloadable guide is available at www.nurs.co.uk advising on how to use electricity safely.
The two most prominent dangers of using electricity are the risk of fire and/or injury. According to Phil Grace Norwich Union’s liability risk manager, “to mitigate the risk of fire or injury, all electrical installations and wiring should be checked to ensure they are suitable for the task involved.”
The correct safeguards and precautions must also be used, for example circuit breakers to cut the supply if necessary. All people who work on or with electrical equipment should be trained accordingly and be fully aware of the risks.
One day or half-day electrical safety awareness courses, run at companies’ premises are a good way to manage risks. These can be tailored to suit particular electrical hazards and are currently available from Norwich Union Risk Services.” (www.nurs.co.uk).
Multi-lingual SFBB available online
‘Safer food, better business’ (SFBB) guides for the small businesses can now be accessed in 16 different languages. The SFBB pack explains the Food Standard Agency’s food hygiene management programme currently being used across the country to help small businesses improve food safety, through the safe preparation, handling and storage of food, and to comply with food legislation.
A complementary pack in 16 different languages and video scenes of realistic situations in small catering and retail businesses is now available as additional support for businesses implementing and training staff in SFBB. The information can be found at www.sfbbtraining.co.uk
HMRC new guidance on working from home
HM Revenue & Customs (HMRC) has issued updated guidance clarifying what allowable home costs self-employed people can claim against their business.
The guidance is non statutory and focuses on the use of home, “wholly and exclusively” for business. The guidance allows for an apportionment of a range of household costs, such as cleaning, mortgage interest, council tax and home insurance, if an area of their home is used solely for business purposes, for an identifiable amount of time. The resulting allowance for home based businesses does not produce a material increase reduction in their income tax liability as a result of the change in allowable expenditure.
Further details can be found at
www.hmrc.gov.uk/manuals/bimmanual/BIM47825.htm
Increase in CCJs
Research conducted by the Credit Management Research Centre (CMRC) at Leeds University Business School has found that the number of County Court Judgements (CCJs) has increased by fivefold.
The worst affected sectors are property, retail, transport and business services. The principal contributory factors were the credit crunch and the economic slowdown leading to firms breaking their payment terms. CMRC predict that insolvencies will increase by more than 20% in the next two years.
VAT errors help for businesses
From 1st July 2008, HM Revenue & Customs has announced plans to allow businesses to correct their own errors of up to £10,000 on their VAT returns.
HMRC will raise the current £2,000 limit below which traders can currently amend their VAT mistakes by £8,000.
This means that if taxpayers discover an error of up to £10,000 on their previous VAT return, they can amend it on the next return, rather than make a separate disclosure to HMRC.
Errors spotted by the taxpayer of more than £10,000 can also be put right on the return for traders whose turnover for VAT purposes exceeds £1million.